Organiser Songwut Khumarak said the "sexy body" category was only meant to boost the self-confidence of the children, some of whom were as young as three-years-old.
But children's rights activists condemned the contest, saying that it reinforced Thailand's image as a haven for paedophiles.
"We overlooked the fact that people might think the categories were offensive or negative," Mr Songwut told the Associated Press.
Mr Songwut said that he had only chosen the title of the "sexy body" category because it "sounded fun".
But Carmen Madrinan of the campaigning group Ecpat disagreed.
"This is an example of how the adult sexual interest in children is legitimized and has gradually been normalized in society", she said.
And Wallop Tungkananurak, a senator in the Thai Parliament, urged the government to stop the contest altogether.
"There is no reason why children need to think about sexiness or try to be sexy. It is ridiculous. There are many other ways to boost their self-confidence," he told the Associated Press news agency.
BBC UK 27 May
